Check out the new LL.M Signing Day Page

For those who are interested in pursuing an LL.M next year, go ahead and check out the LL.M Signing Day page.

Tax Tracks Volume 1 – TurboTax Raps

Apparently TurboTax created a contest a couple of years ago to see who could create the best Tax Rap. Unfortunately, I was unaware of the promotion, but I was impressed with the top 10 finalists entries. I have included the video which I believe is the best one. I have also included the link if you wish to watch the other entries. Enjoy.

http://www.youtube.com/view_play_list?p=1EF2808D1F772CB3&search_query=tax

Sex Reassignment Surgery Expenses Deductible; Breast Augmentation Expenses Not Deductible (or could they be?)

The tax world has been buzzing about the recent tax court decision O’Donnabhain v. Commissioner, 134 T.C. No. 4 (February 2, 2010), which held that gender identity disorder (GID) is a disease within the meaning of section 213 and that an individual’s expenses for sex reassignment surgery and hormone replacement treatment are deductible medical expenses. However, the Tax Court held that expenses for breast augmentation are not deductible because they are cosmetic under section 213(d)(9).

The Petitioner in the case, Rhiannon G. O’Donnabhain was born genetically as a male, but after a diagnosis that she was suffering from severe GID, she began feminizing hormone treatment therapy. Thereafter, she lived as a female and had surgery to feminize facial features, as well as have sex reassignment  and breast augmentation surgeries. On her 2001 tax return O’Donnabhain deducted approximately $21,000, the cost of her hormone therapy, sex reassignment surgery, and breast augmentation. The IRS dissallowed the medical expenses arguing that she did not suffered from a disease and that the treatments were cosmetic and thus were excluded as an expense under section 213.

The Tax Court found that most of the expenses incurred by O’Donnabhain were deductible, emphasizing that the expenses incurred were for the treatment of the disease GID. However, the court held that the expenses incurred from the breast augmentation procedure were not deductible because the augmentation simply improved the appearance and was not for treatment of GID, thus excluded from the deduction under section 213.

Although the Tax Court held that the breast augmentation surgery expenses were not deductible under section 213, an argument (albeit perhaps far-fetched) could be made that the expense are deductible as a trade or business expenses under section 162. Section 162(a) states that “there shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” I am not certain what Ms.O’Donnabhain’s trade or business is currently, however, one could argue that breast augmentation surgery would be a necessary expense incurred in carrying on a trade or businesses, in light of her other surgeries.

Because future cases will likely turn on the facts and circumstances (and who has the best experts), this case may not represent the black letter law on this issue.

“Oh the places you’ll go”…to get a job in trusts and estates

Law students interested in working in the trusts and estates practice area are often sold on the idea of working for “BIG LAW” in big cities because of the prospects of working on large estates.  New York City, Los Angeles, and Miami may come to mind when thinking of potential cities to occupy a cozy office to embark on your estate planning career. However, gaining valuable experience working on large estates may not be limited to only major cities.

In a 2006 study, Kiplinger’s Magazine surveyed cities for households worth $1 million dollars or more, excluding the value of their primary residence.  The top five towns containing the highest percentage of millionaire households were:

–          Los Alamos, New Mexico

–          Naples, Florida

–          Stamford, Connecticut

–          Vero Beach, Florida

–          Hilton Head, South Carolina

What do these statistics mean for prospective trusts and estates attorneys?  There may be bigger opportunities in smaller markets at smaller firms.  Naples, Vero Beach and Hilton Head are all known as places where wealthy retirees flock to.  Stamford is home to a large concentration of corporate executives from New York and Los Alamos is a city full of highly paid government scientists.

For those of you interested in trusts & estates work, there may be big opportunities in small markets.

University of Florida places second at National Tax Moot Court Competition

The University of Florida Tax Moot Court Team earned second place in this year’s National Tax Moot Court Competition sponsored by the Tax Section of the Florida Bar. After victories against Louisiana State University, University of Wisconsin, and Charleston Law School, the team argued in the final round before a panel United States Tax Court Judges. The panel included Senior Judge Renato Beghe and Special Trial Judges Lewis R. Carluzzo and Peter J. Panuthos.

This year’s problem asked the participating law students to consider whether an overstatement of basis constitutes an omission from gross income under IRC 6501 and whether a partnership may raise the defense of the reasonable cause exception at the partnership proceeding.  The problem is particularly current in light of the Treasury’s release of Temporary Regulation 301.6501(e)-1T, which states that an overstatement of basis does constitute an omission from gross income. This is contrary to the Supreme Court’s holding in  Colony, Inc. v. Commissioner, 357 U.S. 28 (1958). Recent decisions in the Ninth and Federal Circuit Court of Appeals have affirmed the Colony decision. The Government has appealed the Federal Circuit’s decision in Salman Ranch Ltd. v. U.S., 573 F.3d 1362 light of the new regulations.